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Shown Here:Introduced in Senate (04/29/2014)

To modify chapter 90 of title 18, United States Code, to provide Federal jurisdiction for theft of
trade secrets.

IN THE SENATE OF THE UNITED STATES

April 29, 2014

Mr. Coons (for himself and Mr. Hatch) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

A BILL

To modify chapter 90 of title 18, United States Code, to provide Federal jurisdiction for theft of
trade secrets.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1.Short
title.

This Act may be cited as
the “Defend Trade Secrets Act of 2014”.

SEC. 2. Federal
jurisdiction for theft of trade secrets.

(a) In
general.—Section 1836 of title 18, United States Code, is amended
to read as follows:

“§ 1836. Civil
proceedings

“(a) Private civil
actions.—

“(1) IN
GENERAL.—An owner of a trade secret may bring a civil action under this subsection
if the person is aggrieved by—

“(A) a violation of
section 1831(a) or 1832(a); or

“(B) a
misappropriation of a trade secret that is related to a product or
service used in, or intended for use in,
interstate or foreign commerce.

“(2) CIVIL EX PARTE
ORDER FOR PRESERVATION OF EVIDENCE AND SEIZURE.—

“(A) IN GENERAL.—Based on an affidavit or verified complaint satisfying the requirements of this paragraph, the
court may, upon ex parte application and if the court finds that issuing
the order is necessary to prevent irreparable harm, issue appropriate
orders—

“(i)(I) providing for the preservation of evidence in a civil action brought under paragraph (1), including
by making a copy of an electronic storage medium that contains the trade
secret; or

“(II) described in clause (i) or (ii) of paragraph (3)(A); and

“(ii) providing for the seizure of any property used, in any manner or part, to
commit or facilitate the commission of a violation alleged under
subparagraph (A), except that the order—

“(I) may not provide for the seizure of any property that is merely incidental to the alleged violation
unless necessary to preserve evidence; or

“(II) shall provide for the seizure of any property in a manner that, to the extent possible, does not
interrupt normal and legitimate business operations unrelated to the trade
secret.

“(B) REQUIREMENTS FOR APPLICATION ORDER.—Notwithstanding rule 65 of the Federal Rules of Civil Procedure, the requirements in paragraphs
(2) through (11) of section 34(d) of the Trademark Act of 1946 (15 U.S.C.
1116) shall apply to any ex parte application or seizure order under
subparagraph (A). Any reference in such paragraphs (2) through (11) of
section 34(d) of the Trademark Act of 1946 to section 32 of such Act
shall be read as references to
this section, and references to use of a counterfeit mark in connection
with the sale, offering for sale, or distribution of goods or services
shall be read as references to a misappropriation of a trade secret.

“(3) REMEDIES.—In
a civil action brought under this subsection, a court may—

“(A) grant an injunction—

“(i) to prevent any actual or threatened violation described in paragraph (1) on such terms as the court
deems reasonable;

“(ii) if determined appropriate by the court, requiring affirmative actions to be taken to protect a
trade
secret; and

“(iii) in exceptional circumstances that render an injunction inequitable, that conditions future use upon
payment of a
reasonable royalty for no longer than the period of time for which use
could have been prohibited;

“(B) award—

“(i) damages for
actual loss caused by the misappropriation of a trade secret;

“(ii) damages for any
unjust enrichment caused by the misappropriation of the trade
secret that is
not addressed in computing damages for actual loss; and

“(iii) in lieu of damages measured by any other methods, the damages caused by misappropriation measured
by imposition of liability for a reasonable royalty for a
misappropriator’s unauthorized disclosure or use of a trade secret;

“(C) if the trade
secret described in paragraph (1)(B) is willfully or maliciously
misappropriated, award exemplary damages in an amount not more than
3 times the amount
of the damages awarded under subparagraph (B); and

“(D) if a claim of
misappropriation is made in bad faith, a motion to terminate an
injunction is
made or opposed in bad faith, or a trade secret is willfully and
maliciously
misappropriated, award reasonable attorney's fees to the prevailing
party.

“(b) Jurisdiction.—The
district courts of the United States shall have original
jurisdiction of civil
actions brought under this section.

“(c) Period of
limitations.—A civil action under this section may not be
commenced later than 5 years after the date on which the
misappropriation is
discovered or by the exercise of reasonable diligence should have
been
discovered. For purposes of this subsection, a continuing
misappropriation
constitutes a single claim of
misappropriation.”.

(b) Definitions.—Section
1839 of title 18, United States Code, is amended—

(1) in paragraph (3),
by striking “and” at the end;

(2) in paragraph (4),
by striking the period at the end and inserting a semicolon; and

(3) by adding at the
end the following:

“(5) the term
‘misappropriation’ means—

“(A) acquisition of a
trade secret of another by a person who knows or has reason to know
that the
trade secret was acquired by improper means; or

“(B) disclosure or use
of a trade secret of another without express or implied consent by
a person
who—

“(i) used improper
means to acquire knowledge of the trade secret;

“(ii) at the time of
disclosure or use, knew or had reason to know that the knowledge of
the trade
secret was—

“(I) derived from or
through a person who had used improper means to acquire the trade
secret;

“(II) acquired under
cir­cum­stances giving rise to a duty to maintain the secrecy of
the trade
secret or limit the use of the trade secret; or

“(III) derived from or
through a person who owed a duty to the person seeking relief to
maintain the
secrecy of the trade secret or limit the use of the trade secret;
or

“(iii) before a
material change of the position of the person, knew or had reason
to know
that—

“(I) the trade secret
was a trade secret; and

“(II) knowledge of the
trade secret had been acquired by accident or mistake;

“(6) the term
‘improper means’—

“(A) includes theft,
bribery, misrepresentation, breach or inducement of a breach of a
duty to
maintain secrecy, or espionage through electronic or other means;
and

“(B) does not include
reverse engineering or independent
derivation; and

“(7) the term ‘Trademark Act of 1946’ means the Act entitled ‘An Act to provide for the registration and protection of trademarks used in commerce, to carry out
the provisions of certain international conventions, and for other
purposes’, approved July 5, 1946 (15 U.S.C. 1051 et seq.) (commonly referred to as the ‘Trademark Act of 1946’ or the ‘Lanham Act’).”.

(c) Exceptions to prohibition.—Section 1833 of title 18, United States Code, is amended, in the matter preceding paragraph (1),
by inserting “or create a private right of action for” after “prohibit”.

(d) Technical and
conforming amendment.—The table of sections for chapter 90 of
title 18, United States Code, is amended by striking the item relating to
section 1836 and inserting the following:

(e) Rule of
construction.—Nothing in the amendments made by this section shall
be construed to modify the rule of construction under section 1838 of
title 18,
United States Code, or to preempt any other provision of law.